KATHMANDU, Oct 1
Investment of northern neighbor China is rising in Nepal. Chinese investment has been rising as the Chinese government has prioritized Nepal as the two countries are preparing to sign the Bilateral Investment Protection and Promotion Agreement (BIPPA) and amidst increasing attraction of tourists to Nepal.
China had overtaken India in terms of number two years ago. China has made investment commitment of Rs 48.11 billion through 915 projects, according to the Department of Industry. This data only includes projects with investment of less than Rs 10 billion. Chinese investors have also signed agreements for big projects through the Investment Board.
China Three Gorges Corporation has agreed to invest on 750 MW West Seti reservoir based project. The company, which already has received permission to bring foreign investment, will invest over Rs 150 billion. Three Gorges will have 65 percent stake in the project to be developed in cooperation with the Nepal Electricity Authority (NEA). The NEA will have 25 percent stake and locals 10. The estimated project cost is around Rs 250 billion including the cost of transmission line.
Similarly, Sino Hydro Corporation has brought investment of Rs 7 billion for 150 MW Upper Marsyangdi Hydropower Project to be completed in December. China Water and Electric Corporation is also developing 20 MW Modi Hydropower Project. Hong Kong Red Lion Cement No 3 (Hongshi Group) has also already been given permission by the board to bring investment of Rs 36 billion. Hongshi will have 70 percent stake in Shivam Cement and Nepalis 30 percent after that.
India has made investment commitment for 624 projects until now. Indian investment in Nepal has not increased much in recent times despite age old relations. “Chinese investment has increased comparatively. China will overtake India even in investment amount within a few years if the trend were to continue,” Director General at the department Maheshwore Nepal said.
Chinese are attracted more toward, hotels, restaurants, hydropower, cargo and cement factories, according to the department. “China, that is becoming the largest economy in the world, is widening the scope of its investment in Nepal,” Neupane added. China has established 219 tourism related projects until now while Indian investment in the sector is almost half. There are 59 tourism related projects with Indian investment.
Private sector leaders say Chinese are attracted also because Nepal has investment potential. “Chinese are eager to invest in Nepal. They show interest about Nepal every day. Chinese investment will rise significantly if there is peace in Nepal and investment environment is created,” President of Nepal-China Chamber of Commerce Rajesh Kaji Shrestha said. He, however, said that investment cannot increase in the current situation and pointed that both the countries must pay attention toward diplomatic relations.
The government is already in the final stage of signing BIPPA with China to attract investment. Different acts and laws are also being formulated to attract adequate foreign investment.
Source: Karobar Daily (Oct 2, 2015)